Most small business owners never question the validity of their business model. Is it a successful model? Does it make sense? Will it make money? Yet your business model is your foundation. It does 2 things
- It explains to all who ask how your business provides value to its target market. How do you make their life easier, happier, richer and more successful? Why do your customers come to you because … you have a convenient location, there is easy parking, your after sales service is good, you recognize and greet all your customers, you have a unique understanding of their business, your product/service is the best value for money, no one else can supply it and so on
- It demonstrates why your business will be financially successful. Do you have lower costs than your competitors, and if so, why? Is it because you are skilled at producing your products more efficiently? Do you have a source of raw materials that others pay more for? Can you command a price premium, and if so, why? Is it because your service is so exceptional that people are willing to pay a little more, or is it because you provide 24/7 service?
Are you providing sufficient value that people will pay to obtain your product/service at a price that will make you a profit?